State of the Market

[Smartie]

FTE contracts are the worst of all worlds. A salary equivalent to a permanent hire with fewer benefits and less stability. Why would we want more of those??

Those Inside roles with crap rates (many of them are actually Umbrella roles) only getting filled because overall weak demand for labor and there is not much competition for it. Once the overall situation will improve (and it will, no dip is infinite) there will not be many takers, so employers would need to either up the rate or offer roles as fixed term employment contracts. I hope that govt will have enough will to incentivize latter by curbing use of umbrellas (or ban them completely, who knows!). However, with PM defining "working people" as ones who "get their income from work", that is probably too nuanced to happen.

What unlikely to happen is return to widespread availability of Outside roles. There still will be market for niche skills, combined with right clearance and certifications, however with HMRC reportedly starting to police IR35 compliance, such roles will be relatively rare. And ones who going to stay in this market will need to run proper business operation (brand, marketing, service offerings, multiple clients) rather than sending CVs to agencies.

[Sub]

FTE contracts are the worst of all worlds. A salary equivalent to a permanent hire with fewer benefits and less stability. Why would we want more of those??

FTE is better than Inside IR35 contracts offering no employment benefits at all. With regards if we want more of them - probably not more than permanent places, however there is sometimes genuine need for temporary workforce, project, short task, maternity etc. If FTE will be offered instead of Inside ones, that would be better.

[oliverson]

No versus you p155es up against a third holiday and new tesla. Public services are starved of funds thanks to 14 years of Tory mismanagement and decline.

Funny you should say that as I'm month 2 into my Spanish visit and eyeing up a new Tesla for when this one's lease expires next year

Thought you'd gone perm, in which case why are you still on this site?

[SussexSeagull]

Only thing that changed with the reform is that now employers face consequences of incorrect determination - the determination itself haven't changed a bit. Previously, employers could hire contract workers to spots normally occupied by employees and enjoy flexibility, lack of need of protecting employment rights, reduced risk of unionization, etc with zero tax risk.

If employers would want to hire "genuine businesses" they still would be doing it. Fact that most of the contracts are now offered inside proves the point about previously widespread "disguised employment".

Unfortunately, yes reform has consequences for many contractors who have been doing good for themselves for all those years, myself included. However, many of those contractors never been businesses as all they did was selling their labor, leaving all the product of their work to the client for a day rate. Same way as employee selling their labor to the employer for a wage.

More and more clients aren't doing proper due diligence. The fact someone thinks they are, or indeed might be, a genuine business is largely irrelevant when up against that.

A lot of people remained outside for several decades without any interest from the HMRC. For all intents and purposes they were proper businesses. Hindsight doesn't change that.

[SchumiStars]

London is supposed to be one of the global tech places for startups. I have no idea how the cull of wages, IR35, will attract talent into the market.

It maybe more lucrative to be abroad, IT is an international skill set.

It does seem the good days are long behind us. I have posted before that when I started in 2k, there were contractors on £100ph + overtime. These guys would not go home.

[Smartie]

I disagree. For a start, it depends on the rate you get inside. It could be just as good as outside, though it's unlikely.
You can mitigate the extra tax cost by putting more into a pension - £60k this year plus go back to fill in the previous 3 years if available. All tax free.

Doing this will net you up to 70% of the rate, rather than the 55%ish if you don't make use of a pension.

My client decided to move all the contractors inside but paid a significantly higher rate to compensate.
Then they got a consultancy to hire us as perms two years ago - the deal was the same income as if contracting.
I've been there over four years now and had the nod for another 6 months.
Currently I pay around a third of the total in tax, a third into my pension and take home a third.

I realise this is a fortunate position to be in, given how the market has been the past couple of years and I have a great deal of sympathy for all the posters here who've been unlucky with the timing and duration of this downturn.

If you need to work, then anything is better than nothing but FTE contracts are really the worst option.

FTE is better than Inside IR35 contracts offering no employment benefits at all. With regards if we want more of them - probably not more than permanent places, however there is sometimes genuine need for temporary workforce, project, short task, maternity etc. If FTE will be offered instead of Inside ones, that would be better.

[dx4100]

Funny you should say that as I'm month 2 into my Spanish visit and eyeing up a new Tesla for when this one's lease expires next year

Thought you'd gone perm, in which case why are you still on this site?

Me and all the other perms :P

I am not perm until next month and I will still have a LTD. But thanks for your pointless empty response :P

[jamesbrown]

I disagree. For a start, it depends on the rate you get inside. It could be just as good as outside, though it's unlikely.
You can mitigate the extra tax cost by putting more into a pension - £60k this year plus go back to fill in the previous 3 years if available. All tax free.

Doing this will net you up to 70% of the rate, rather than the 55%ish if you don't make use of a pension.

My client decided to move all the contractors inside but paid a significantly higher rate to compensate.
Then they got a consultancy to hire us as perms two years ago - the deal was the same income as if contracting.
I've been there over four years now and had the nod for another 6 months.
Currently I pay around a third of the total in tax, a third into my pension and take home a third.

I realise this is a fortunate position to be in, given how the market has been the past couple of years and I have a great deal of sympathy for all the posters here who've been unlucky with the timing and duration of this downturn.

If you need to work, then anything is better than nothing but FTE contracts are really the worst option.

I assume you both mean FTC (fixed term contract of employment) because FTE is full time equivalent.

[coolhandluke]

FTC you get full employment benefits but obviously your contract has a set end date. I prefer it to a normal perm position to be honest as I don't like to stay at one place. You do pay lots of tax though!

I was a contractor for just under 10 years and I can say that not one of my contractor colleagues were a business in anyway shape or form. Everyone was a bum on a seat getting paid via a Ltd to save on tax.

[dx4100]

The reality is you have very little rights until you have been anywhere for two years or more. Someone on a FTC is the lowest of the low in the food chain. No real commitment to you and at the lowest rate they can get away with and most of it going to the HMRC.

At least on a proper perm contract there is an aim from all parties to build a relationship and usually with a package to show that. And as a contractor inside or out, everyone is on the same page on what this is and you will be getting a higher rate than permies because of that to compensate you for the show term nature.